Terraform open source has been an institution in the world of Infrastructure as Code (IaC) for many years, allowing developers and operations staff to manage and provision infrastructure economically. Its open-source status supported a thriving ecosystem and extensive use. Recent changes in licensing, though, have raised questions regarding its open-source nature and the creation of alternatives.
Learning about Terraform‘s Licensing History
Is Terraform Open Source?

At first, Terraform open source was released under the Mozilla Public License v2.0 (MPL 2.0), an open-source permit license that allowed users to utilize, modify, and distribute the software freely. This permit grew a strong community and helped support Terraform’s fast adoption into different industries.
Transition to Business Source License (BSL)
In August 2023, HashiCorp migrated from MPL 2.0 to the Business Source License (BSL) v1.1 for future releases of Terraform. According to BSL, the source code is still open but subject to usage restrictions, particularly regarding commercial products that compete with HashiCorp offerings. The transition implies that though Terraform code is still open, it does not fit into the classical definition of open-source software.
Implications of the Licensing Change
Community Response
The transition to BSL received diverse reactions. The open-source community was concerned that the use may be restricted and that it opens the door to other open-source projects being followed by commercial examples. The shift raised debates about the harmony between open-source and commercial interests.
Impact on Users
For current users, the change in licensing implies that they can still use versions that were published under MPL 2.0 but future updates will be subject to the BSL limitations. Organizations that provide services that could compete with HashiCorp offerings must evaluate their utilization of newer versions of Terraform in order to maintain compliance.
Get exclusive access to all things tech-savvy, and be the first to receive
the latest updates directly in your inbox.
Development of Open Source Terraform Alternatives
The transition in licensing prompted the emergence and increased use of open-source alternatives for Terraform opensource.
OpenTofu

OpenTofu is an open-source fork of Terraform open source, developed due to the change in licensing. OpenTofu seeks to preserve the open-source nature, whereby users get an outright open tool to manage infrastructure provisioning. OpenTofu is also compatible with Terraform configurations, hence making it simple for users to migrate.
Alternative Options
Below are the alternative options:
Pulumi: Infrastructure as Code with Real Programming Languages

Pulumi is a next-generation infrastructure as code (IaC) platform that differentiates itself by enabling developers and DevOps teams to write and manage cloud infrastructure in common general-purpose programming languages like TypeScript, JavaScript, Python, Go, C#, and Java. In contrast to other IaC tools based on domain-specific languages (DSLs) like HCL in Terraform or YAML in CloudFormation, Pulumi enables teams to use full programming features like loops, conditionals, functions, classes, and even third-party libraries.
Key Features
- Programming Language Support: Leverage existing developer experience and language ecosystems to handle infrastructure.
- Multi-cloud Support: Pulumi supports provisioning infrastructure on AWS, Azure, Google Cloud, Kubernetes, and others, using a uniform method.
- State Management: Provides a native state backend with self-host or Pulumi’s managed service for collaboration, state history, and auditing.
- Policy as Code: Supports writing governance and compliance rules as code (e.g., via Open Policy Agent).
- Integration with CI/CD: Simple integration with GitHub Actions, GitLab, Azure DevOps, Jenkins, etc.
Benefits
- High flexibility because of utilization of actual programming abstractions.
- Robust IDE and tooling support, such as autocompletion of code, debugging, and refactoring.
- Simpler onboarding for development teams already aware of supported languages.
- Facilitates unit testing of infrastructure logic, enhancing confidence and stability.
- Supports code reuse and modularization using familiar constructs such as packages and libraries.
Use Case
Pulumi is most well-suited for development-focused infrastructure requirements within organizations, e.g., developing microservices architecture, provisioning cloud-native resources, or deeply integrating with CI/CD pipelines.
Ansible: Simplified Provisioning and Declarative Configuration

Ansible is an open-source solution that started as a configuration management solution but has evolved to include infrastructure provisioning, application deployment, and orchestration. It leverages YAML-based playbooks to specify automation tasks and works agentlessly over SSH or WinRM, making its installation and use a breeze in heterogeneous environments.
Major Features
- Agentless Architecture: There is no need to install agents on target hosts.
- Playbooks: YAML files readable by humans specify the desired state and provisioning logic.
- Modules: There are thousands of built-in modules supporting different infrastructure providers (AWS, Azure, GCP, VMware, OpenStack, etc.).
- Extensibility: End users can code custom modules using any language.
- Inventory Management: Ansible dynamically manages host groups through static files or dynamic inventory scripts (e.g., cloud providers).
- Idempotency: Tasks only execute when needed, preventing unwanted changes.
Benefits
- Ease of use and readability with YAML syntax.
- Large ecosystem of modules and community roles (Ansible Galaxy).
- Flexible use cases, ranging from infrastructure provisioning through app configuration to continuous deployment.
- Large open-source community and Red Hat support.
- Cross-platform, supporting Linux, macOS, and Windows.
Use Case
Ansible is well-suited to hybrid environments, rapid VM provisioning and configuration, and the automation of application lifecycle management. It’s particularly suited for use in enterprises that already have Red Hat technologies or require an easy tool for automating infrastructure.
Cloudify: Orchestration for Complicated Cloud Environments

Cloudify is an open-source orchestration platform that is used to model, deploy, and manage sophisticated applications and network services on multiple cloud environments and technology stacks. Based on the TOSCA (Topology and Orchestration Specification for Cloud Applications) standard, Cloudify provides a model-driven methodology to automate the whole service lifecycle from configuration and provisioning to monitoring and healing.
Key Features
- TOSCA-Based Modeling: Enables users to define applications and services in a standardized, reusable, and vendor-independent manner.
- Multi-Cloud and Hybrid Support: Supports multiple clouds, including AWS, Azure, OpenStack, Kubernetes, VMware, and others.
- Workflow Automation: Supports sophisticated automation workflows like auto-scaling, failover, rolling upgrades, and others.
- Service Composition: Nest and compose blueprints to define highly distributed and dependent environments.
- Plugins and Integrations: Numerous integrations with cloud providers, config management tools (Ansible, Puppet, Chef), container runtimes, and monitoring tools.
- Edge and Telco Support: High use case in 5G and NFV (Network Functions Virtualization) use cases.
Benefits
- Supports advanced orchestration beyond basic provisioning.
- Vendor-agnostic and standard-based modeling that provides portability and flexibility.
- Manages day-2 activities such as monitoring, scaling, and healing out-of-the-box.
- Sophisticated lifecycle management, especially for network-intensive or edge computing setups.
Use Case
Cloudify is most suited for organizations operating highly distributed or hybrid infrastructures, especially those that require deep integration between network infrastructure, containers, and multi-cloud strategies. It’s optimal in telco, fintech, or IoT environments where service orchestration extends beyond provisioning.
Selecting the Right Tool
When selecting an open-source Terraform alternative, organizations need to consider:

- Compatibility: How simple is it to migrate existing Terraform configurations?
- Community Support: Is there a community for support and development?
- Feature Set: Does the tool provide the organization’s infrastructure provisioning requirements?
- Licensing: Is the license compatible with the plans of the organization for usage and distribution?
Conclusion
Terraform’s move from an open-source license to BSL has far-reaching consequences for its users. Although the tool is still potent, organizations that value open-source solutions may consider alternatives such as OpenTofu, Pulumi, or Ansible. It’s important to determine the particular needs and limitations of your infrastructure projects to select the most appropriate tool.
FAQs
What is Terraform Open Source?
Terraform Open Source is an open-source infrastructure as code (IaC) tool created by HashiCorp that enables you to define and provision infrastructure in a declarative configuration language called HCL (HashiCorp Configuration Language). It assists in automating cloud infrastructure across several service providers such as AWS, Azure, Google Cloud, and more.
Is Terraform Open Source actually free to use?
Yes, Terraform Open Source is absolutely free to use under the Mozilla Public License v2.0. It can be utilized by individuals, startups, and even enterprises to provision and manage infrastructure without paying any licensing fees.
Do I need to know programming in order to use Terraform Open Source?
Not necessarily. Terraform employs HCL, which is a human-readable configuration language that is designed to be simple. Although technical knowledge is useful, you do not have to be a developer to use Terraform.